Bombay High Court
Arun Ashok Jadhav And Anr vs Ravindra Dagadu Gaikwad And Ors on 25 March, 2025
2025:BHC-AS:13722
FA-1120-2024.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO. 1120 OF 2024.
1. Arun Ashok Jadhav ]
Age- 48 Yrs, Occ. Business and Trustee ]
(Treasurer) R/at : C-1001/1002, Pride ]
]
Panorama, Shivaji Housing Society,
]
Senapati Bapat Road, Pune 411 016. ]
2. Rajani Arun Jadhav ]
Age- 43 Yrs, Occ- Housewife and Trustee ]
R/at : C-1001/1002, Pride Panorama, ]
]
Shivaji Housing Society, Senapati Bapat
] ... Appellants.
Road, Pune 411 016
Versus
TALLE
SHUBHAM 1. Ravindra Dagadu Gaikwad ]
ASHOKRAO
Digitally signed by
Age-49 Yrs, Occ: Business ]
TALLE SHUBHAM
ASHOKRAO R/at : Antrolikarnagar, 1, Plot No. 36, ]
Date: 2025.03.25
17:33:14 +0530 Near Rajiv Udyan, Solapur, Taluka District ]
Solapur. ]
2. Anamika Ravindra Gaikwad ]
Adult, Occ. Housewife R/at : ]
Antrolikarnagar, 1, Plot No. 36, Near ]
Rajiv Udyan, Solapur, Taluka District ]
Solapur.
3. Smt. Sheetal Dagadu Kavathekar ]
Adult, Occ. Housewife, ]
R/at: Antrolikarnagar, 1, Plot No. 36, ]
Near Rajiv Udyan, Solapur, Taluka District ]
Solapur. ]
4. Shri. Ramesh Vitthaldas Zariwalla ]
Age: Adult, Occ. Business ]
R/at : 83, Antrolikarnagar, 1, Solapur, ]
Taluka District Solapur. ]
5. Niraj Ramesh Zariwalla ]
Age: Adult, Occ. Business ]
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R/at : 83, Antrolikarnagar, 1, Solapur, ]
Taluka District Solapur. ]
6. Shri. Dagadu Sayappa Gaikwad ]
Age- Adult, Occ. Business ]
R/at : C-1001/1002, Pride Panorama, ]
Shivaji Housing Society, Senapati Bapat ]
]
Road, Pune 411 016.
7. Shri. Ganesh Shankarlal Karva ]
Age : 61 Yrs. Occ. Business ]
R/at : Mantri Chandak Park, Rajhans, ]
Bungalow, Near Rupa Bhavani Mata, ]
Taluka District Solapur. ]
8. Kum. Sushmita Ravindra Gaikwad ]
Adult, Occ. Education, ]
R/at: Antrolinagar, 1, Plot No. 36, Near ]
Rajiv Udyan, Solapur, Taluka District ]
Solapur. ]
9. Manoj Subhash Nishandar ]
Age : 51 Yrs, Occ. Agriculturist, ]
R/at: Bhavani Peth, Madewasti, Taluka ]
District Solapur ]
10. Noha Ravindra Gaikwad ]
Adult, Occ. Education ]
R/at : 65, Antrolirnagar, Plot No. 36, Near ]
Rajiv Udyan, Solapur, Taluka Dist. ]
Solapur. ] ...Respondents.
------------
Mr. A. V. Anturkar, Senior Advocate along with Mr. Sugandh Deshmukh for the
Appellants.
Mr. Vineet Naik, Senior Advocate along with Mr. Ashutosh Kulkarni, Mr. Mihir
Jaykar i/b Mr. Akshay Kulkarni for the Respondent Nos. 1, 2, 4, 5 and 8 to10.
Mr. Prasad Kulkarni and Adv. Raghvendra Kulkarni i/b Ms. Jyoti Kawade for the
Respondent Nos. 3 and 6.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved on: February 5, 2025.
Pronounced on : March 25, 2025.
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JUDGMENT :
1. The First Appeal has been preferred challenging the order
dated 22nd May, 2023 passed by the Joint Charity Commissioner, Pune
in Application No. 48 of 2023 filed by the present Appellants under
Section 41 E of the Maharashtra Public Trusts Act, 1950 ("the MPT
Act").
FACTUAL MATRIX :
2. The Trust in question is Late Sushilabai Gaikwad
Bahuudeshiya Sanstha, Solapur which runs a college known as
Bharatratna Indira Gandhi College of Engineering. An Application
under Section 41E of MPT Act came to be filed by the present
Appellant seeking injunction against the Respondent Nos 1, 2,4,5 and 8
to 10 restraining them from representing themselves as office bearers
on basis of Change Report No 1479 of 2023 and using the signature
and seals of the Trust as office bearers and for mandatory injunction
against Respondent Nos 1, 2 and 5 to re-deposit the amount of Rs.
28,50,000/- withdrawn from the bank account of the Trust account.
3. It was alleged that Respondent No 1 unauthorisedly
convened a general body meeting in violation of the provisions of the
Constitution and conducted elections of office bearers, and Change
Report No. 1479 of 2023 was filed in that regard. Pursuant thereto, the
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Respondent Nos 1, 2, 4, 5 and 8 to 10 have claimed right to operate the
Trust's bank account as office bearers and members of executive
committee. The Respondent Nos 8 to 10 were never granted
membership of the Trust by any valid executive committee. The trust in
question is having various bank accounts which are operated jointly by
founder president and treasurer, whose specimen signatures were
submitted to the Bank by way of Change Report No. 478 of 2023.
Thereafter on the basis of Change Report No. 1479 of 2023 the
Respondent No. 1 authorized themselves to operate the Bank
accounts. The Bank on receiving the operating instructions obtained
legal advice and thereafter accepted the change which was on the
basis of the resolution dated 20 th August, 2023. During the period from
25th August, 2023 to 9th October, 2023, the Respondent Nos. 1, 2 and 5
withdrew total amount of Rs 28,50,000/ from the bank account out of
which Rs 14,50,000/ was reportedly allocated for employee's salaries,
while the remaining amount was withdrawn for personal use.
4. The Respondents filed their reply denying the allegations
contending that the Respondents were duly elected and possess the
Authority to manage the financial affairs of the college. The Bank
accounts have been operated by the Respondents in their official
capacity as elected office bearers and transactions carried out are
properly accounted for and the amounts have been withdrawn for the
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purpose of the operations of the Trust. It was further contended that
the prayers do not fall within the purview of Section 41E of the MPT
Act.
5. An Interim Application came to be filed under Exhibit-5
seeking order of mandatory injunction that the Chairman, Secretary or
Treasurer as per the Change Application No. 478 of 2023 be directed to
operate the Bank accounts pending Scheme Application No. 278 of
2021 under Section 50-A of MPT Act. Vide order dated 24 th November,
2023, the Joint Charity Commissioner prima facie recorded finding that
the meeting shown to have been held on 20 th August, 2023 appears to
be illegal and that Respondent Nos. 1 and 2 have prepared false and
bogus resolution and submitted it to the Bank in collusion to operate
the account. By an interim order, the Respondent Nos. 1, 2 and 8 to 10
were restrained from looking after the affairs of the Trust and
Professor Dr. B. G. Patil and Asif Shaikh were authorised to carry out
bank transactions through cheque. The Respondent Nos. 1 and 2 were
directed to submit detailed explanation as regards the withdrawn
amount and Dr. B. G. Patil was also directed to give account of the
amounts collected, if any. The Joint Charity Commissioner authorized
the Professor to look after the day to day affairs of the Institution and
directed the Inspector to make monthly visit to the Trust and submit
Report about the financial transactions. The Joint Charity
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Commissioner further directed that, if required, the proposal related to
the institution such as matters related to NAAC Committee, utility bills,
promotion of employees, staff grievances and teachers appointments
to be submitted to the appropriate authority with prior approval of the
office and the Assistant Charity Commissioner was directed to
expedite the pending Scheme Applications and other judicial matters
related to the institution.
6. The Respondents aggrieved by the Interim order preferred
an Appeal before this Court being First Appeal No. 1277 of 2023. Vide
order dated 23rd January, 2024, this Court noted that there is no
averment in the Application that the property of trust is likely to be
wasted or is in danger or is likely to be disposed of at the hands of the
Appellants. This Court noted that there is no finding by the Joint
Charity Commissioner in the order below Exhibit-5 that the property of
the trust is danger or likely to be disposed of or will be wasted and
there is only prima facie observation that there is misuse of power. It
noted the allegation against Dr. B. G. Patil that students were directed
to deposit amount of exam fees in the account of Dr. B. G. Patil and
despite thereof the same person is chosen by the Joint Charity
Commissioner and Respondent Nos. 1 and 2 are restrained from
operating the Bank account. This Court observed that the Respondent
Nos. 1 and 2 have given Pursis that they will not use accounts except
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for statutory payments and quashed the impugned interim order by
directing that Respondent Nos. 1 and 2 shall not withdraw any amount
from any of the Bank accounts of the Trust and all statutory payments
such as salary, NAAC Committee fee etc., to be made only through
RTGS or by crossed cheque. This Court further directed the Respondent
Nos. 1 and 2 to keep proper account and to submit the accounts with
the office of the Joint Charity Commissioner till final disposal of the
main Application under Section 41E. The Appellants herein carried the
order to the Apex Court and by order dated 12th February, 2024 the SLP
came to be dismissed with direction to Joint Charity Commissioner to
dispose of the main Application within a period of three months.
7. The Joint Charity Commissioner by the impugned
Judgment has finally adjudicated the Application No. 48 of 2023. The
Joint Charity Commissioner framed following legal points for
determination:
"a) Whether the application filed by the applicants
under Section 41E of the Act is maintainable and
within the scope of the provision.?
b) Whether there is a prima facie case of
mismanagement, financial irregularities, or risk to the
Trust's property that warrants interim relief under
Section 41E ?
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c) Whether the parallel change reports filed by the
rival groups require adjudication or determination
within the scope of the present application. ?
d) Whether the respondents' actions in operating
the Trust's bank accounts and making withdrawals
constitute unauthorized activities or financial
misappropriation.?"
8. On the aspect of the maintainability, the Joint Charity
Commissioner held that the Application filed is not maintainable in the
present form. On prima facie case of mismanagement or risk to trust
property, the Joint Charity Commissioner noted that this Court had
upheld the Respondents position and found no wrongdoing in the
management of the trust bank accounts. It further opined that the
evidence presented does not establish prima facie case of imminent
risk to the Trust property that warrants relief under Section 41E and
that issues required comprehensive inquiry and determination through
appropriate legal channels.
9. On the aspect of unauthorized activities and financial
misappropriation, the Joint Charity Commissioner held that the
evidence presented is not conclusive and that the Respondents have
provided explanation and justification for their actions asserting the
legitimate authority as elected office bearers and reiterated the need
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for comprehensive inquiry to address the allegations of financial
irregularities and mismanagement. The Joint Charity Commissioner
rejected the Application holding that there is no prima facie case of
imminent risk to the trust property that would warrant interim relief
under Section 41E and passed the following order:
"a) The application filed by the applicants under
Section 41E of the Maharashtra Public Trusts Act,
1950, is dismissed as not maintainable in its present
form.
b) The Deputy or Assistant Charity Commissioner
concerned is directed to inquire into the allegations
of financial irregularities and mismanagement raised
by the applicants, both before and after the orders
passed by the Hon'ble High Court. This inquiry should
be conducted in accordance with the provisions of
the Act and the principles of natural justice, and
report accordingly.
c) The Deputy or Assistant Charity Commissioner is
further directed to adjudicate and determine the
validity of the parallel change reports filed by the
rival groups, in accordance with Section 22 of the Act,
and to decide on the legitimate office bearers and
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trustees of the Trust, expeditiously.
d) All parties are directed to strictly comply with the
orders and directions issued by the Hon'ble Bombay
High Court in First Appeal No. 1277/2023 dated
23/01/2024, and the subsequent order of the Hon'ble
Supreme Court dated 12/03/2024, affirming the High
Court's decision. Any actions or transactions
undertaken by the parties shall be in accordance with
the Hon'ble Courts' orders, including any restrictions
or guidelines imposed on the management of the
Trust's bank accounts and operations. The Deputy or
Assistant Charity Commissioner shall ensure that the
parties adhere to the Hon'ble Courts' orders and take
appropriate measures, within their legal jurisdiction,
to enforce compliance with the same. Failure to
comply with the Hon'ble Courts' orders may result in
initiating contempt proceedings or any other legal
action deemed necessary by the competent
authorities.
e) The parties are at liberty to pursue appropriate
legal remedies concerning the substantive issues and
disputes, as per the provisions of the Act and the
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relevant laws.
f) This order is passed in the exercise of the powers
vested in me as the Joint Charity Commissioner,
Pune, under the Maharashtra Public Trusts Act, 1950.
g) A certified copy of this order shall be sent to the
Deputy/Assistant Charity Commissioner concerned
for necessary action and compliance in accordance
with the directions contained herein.
h) Parties to comply with the order accordingly. No
orders as to costs."
SUBMISSIONS :
10. Mr. Anturkar, learned Senior Advocate appearing for the
Appellants would submit that the Application came to be rejected on
three grounds. Firstly that the High Court as well as the Apex Court has
upheld the Respondent's position and found no prima facie case of
mismanagement or risk to the Trust property. Secondly, that the
evidence of misappropriation presented by the Appellants are not
conclusive and the Respondents have provided explanation. Thirdly,
that the comprehensive inquiry and determination is necessary to
address allegation of financial irregularities. He would further submit
that the Joint Charity Commissioner lost sight of the fact that the
findings were recorded at the interim stage by the High Court and the
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Apex Court. He would further submit that while holding that the
evidence presented by the Appellant is not conclusive, there is no
discussion and only conclusion has been recorded without considering
the evidence produced by Appellant to show misappropriation. He
would further submit that the adjudication under Section 41E could
have been restricted only to the prayers which fall within the purview
of Section 41E without holding that application is not maintainable. He
would further submit that the findings would indicate that the Joint
Charity Commissioner has only considered prima facie case when the
matter was required to be decided finally and that there is no
discussion and reasoned findings. He submits that the entire Judgment
is replete with recording of the pleadings, arguments and submissions
of the parties and the order is vitiated due to non application of mind.
11. He would submit that by order dated 23 rd January, 2024
passed in First Appeal No. 1277 of 2023 certain directions were given
which were not complied with by Respondent Nos. 1 and 2 and
therefore the aspect of financial misappropriation stood concluded. He
would further submit that the order of High Court refers to the pursis
of the Respondent Nos. 1 and 2 that no money will be spent except for
the statutory dues and the record shows that non-statutory payments
have been made. He submits that the order of the High Court
permitted only statutory payment which are salary, NAAC Committee
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fee etc, and that too through RTGS and the expression "etc" was used
contextually to indicate only statutory payments. He would further
submit that the accounts though directed were not produced and only
some bank accounts were produced. He has tendered a detailed
statement to demonstrate the non statutory payments made by
Respondent Nos. 1 and 2 from the Trust account in violation of the
directions of the High Court in First Appeal No. 1277 of 2023. He would
further submit that he is not pressing for prayer clause (a) of the
Application as the same is outside the scope of Section 41E.
12. Per contra Mr. Naik, learned Senior Advocate appearing for
the Respondents would submit that the Application filed under Section
41E sought substantive relief restraining Respondent Nos. 1, 2, 4, 5
and 8 to 10 from representing themselves as office bearers of the
Trust which prayer is now sought to be given up. He submits that the
only other relief was for the re-deposit of sum of Rs. 28,50,000/- in the
trust Account. He submits that it is an admitted position that out of the
sum of Rs. 28,50,000/- a sum of about Rs. 14 lakhs was paid towards
salaries of the staff of the institution. He submits that while allowing
the First Appeal by order dated 23 rd January, 2024, this Court has
restrained the Respondent Nos. 1 and 2 from withdrawing any amount
from the bank account and directed all statutory payments such as
salary, NAAC Committee fee etc., to be made through RTGS or crossed
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cheque and to keep proper accounts. He submits that the order has to
be read in the true spirit and it cannot be said that the payments
required to be made for the functioning of the institution and the Trust
should not be made. He submits that there are no cash withdrawals
and all amounts have been paid through RTGS or by crossed cheque.
13. Pointing out to the statutory provisions of MPT Act, he
submits that under Section 41B proper inquiry can be instituted in
respect of any Public Trust and under 41D the Charity Commissioner
may remove or suspend any trustee. He submits that the provisions of
Section 41E are for grant of injunctive relief which provides for
temporary injunction in order to prevent alienation which is in nature
of pro-tem arrangement. He submits that the Change Report No. 478
of 2023 was in respect of change alleged to have taken place on 19 th
July, 2019 and this Change Report came to be filed on 5 th April, 2023
whereas the Change Report No. 1479 of 2023 filed by the Respondents
was filed on 29th August, 2023 where the Respondents were elected as
trustees pursuant to Annual General Meeting held on 20 th August,
2023.
14. He submits that the Joint Charity Commissioner has passed
balanced order and directed an appropriate inquiry as there is
allegation of misappropriation of funds. He submits that considering
the statutory scheme, without any proper inquiry a shortcut method
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has been adopted by the Appellants under Section 41E of MPT Act. He
would submit that pursis was filed on 8th November, 2023 before Joint
Charity Commissioner stating that there will be no cash payments
withdrawn and the statutory payment and other legal financial
transactions will be conducted through RTGS or through cheque
payment. He would further submit that the Joint Charity Commissioner
while dismissing the Application has directed an inquiry and for the
said purpose under Section 41B (7) of MPT Act there has to be prima
facie finding. He submits that subsequent to the directions, inquiry is
going on. He would point out the bank statements annexed to his
affidavit-in-reply and would submit that substantial payments have
been made towards the 7th pay commission pay difference. He submits
that the institution of the Trust does not have any internet banking
facility and for certain statutory payments such as provident fund,
professional tax etc., amounts have to be transferred to accounts of
the account officer for further payment towards statutory dues. He
submits that such transfer cannot amount to a transfer being in
violation of the order passed by the High Court. He submits that all
necessary payments for the purpose of running the institution have
been paid and the same would be covered by the decision of this Court
in First Appeal No. 1277 of 2023.
15. In rejoinder, Mr. Anturkar, would submit that it is very
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evident that payments have been made to the Advocate's Clerk from
the bank account of the Trust. He submits that in event the payments
were required for the purpose of running day to day affairs of the
institution of the Trust the Respondent could have applied for
modification. He submits that before the Joint Charity Commissioner
pursis was filed by the Appellants specifically alleging that more than
one lakh rupees was transferred from the bank account of the trust in
the name of certain persons who were either working as the Clerk of
the Advocate or are having typing and xerox shop. He submits that the
order of this Court in First Appeal No. 1277 of 2024 is required to be
followed in letter and spirit. He would further submit that from the
bank statement it is clear that the Respondents have defaulted in
complying with their own statement made before this Court that only
statutory payments would be made and that being so the Application
ought to have been allowed.
16. The point for determination is whether there is
mismanagement or risk to the property of the Trust which requires
injunctive reliefs to be granted by allowing the Application under
Section 41-E of MPT Act.
17. The first thing to be noted in the impugned judgment is
that though the Joint Charity Commissioner has dismissed the
Application filed under Section 41E of the MPT Act as not maintainable
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in the present form it has further issued certain vital directions. The
first direction is to the Deputy or Assistant Charity Commissioner to
conduct inquiry into the allegations of financial irregularities and
mismanagement raised by the Applicants both before and after orders
passed by the High Court. Secondly it has also directed all parties to
strictly comply with the orders and directions issued by the High Court
in First Appeal No. 1277 of 2023 dated 23rd January, 2024 and the order
of the Hon'ble Apex Court dated 12 th March, 2024. The Joint Charity
Commissioner has directed that any actions or transaction undertaken
by the parties should be strictly in accordance with the High Court
order and has placed the responsibility on the Deputy or Assistant
Charity Commissioner to ensure that the parties adhere to the Court's
order and to take appropriate measure to enforce compliance with the
same. From the specific directions which have been issued by the Joint
Charity Commissioner it is clear that the allegations of financial
misappropriation raised by the Appellants have not been brushed aside
on the ground that the Application under Section 41E is not
maintainable in the present form but cognizance have been taken of
those allegations by directing an inquiry by the Deputy or Charity
Commissioner.
18. The foundation for the Application under Section 41-E is
that the Respondents have withdrawn amounts from the Trust for their
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personal use and thus there is financial misappropriation. The statutory
provisions of MPT Act provides a detailed procedure to address the
issue of financial misappropriation of the Trust property. Section 37 of
the MPT Act empowers the Deputy or Assistant Charity Commissioner
to inspect affairs of the public trust and if it is found that loss is caused
to the public trust on account of gross negligence, breach of trust, mis-
Application or misconduct of the part of the trustee or any person
connected with the Trust, to make a Report to the Charity
Commissioner who under Section 40 determines whether such loss has
been caused and the person responsible for the same. The provisions
further empower the Charity Commissioner to issue necessary
directions for proper administration of the Trust. More particularly
Section 41B vests power in the Charity Commissioner to institute an
inquiry and take such steps as necessary under the provisions of Act
which may include the suspension, removal or dismissal of the Trustee
by the impugned Judgment. In fact by the impugned judgment, the
Joint Charity Commissioner has set the wheels in motion by instituting
an inquiry into the alleged financial irregularities, which inquiry is
undisputably going on.
19. The Application filed by the Appellants under Section 41E
sought substantive relief of prohibitory injunction restraining the
Respondents from representing themselves as office bearers of the
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Trust which Mr. Anturkar, has fairly conceded is outside the purview of
Section 41E. The other relief sought was an order of mandatory
injunction directing the Respondent Nos. 1, 2 and 5 to re-deposit the
amount of Rs. 28,50,000/- withdrawn from the Trust bank account into
the trust account. The said prayer finds its foundation in the allegation
that there has been unauthorized General Body Meeting pursuant to
which the Respondents have claimed a right to operate the trusts bank
accounts whereas the bank accounts were earlier jointly operated with
the signature of the president and the treasurer as per the provisions
of the Constitution of the trust. It is alleged that during the period
from 25th August, 2023 to 9th October, 2023 the Respondent Nos. 1, 2
and 5 have withdrawn an amount of Rs. 28,50,000/- from the bank
account out of which Rs. 14,50,000/- was paid payment towards the
employees salary while the remaining amount was withdrawn for
personal use. The relief of re-deposit of amounts withdrawn can be
granted only consequent to an inquiry conducted into the allegation of
financial misappropriation. For the Joint Charity Commissioner to
arrive at a conclusion that the amounts which have been withdrawn are
not utilized towards the operations of the trust or the institution but
have been misappropriated for personal use requires something more
than the statements produced by the Appellants showing non
compliance of the order passed by this Court in First Appeal No. 1277
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of 2023. The thrust of the argument of Mr. Anturkar, is that the
Appellants have duly proved that the bank accounts of the trust are
being utilized for purposes other than the operations of the trust or
the institution and therefore the only logical conclusion which should
follow is an order of temporary injunction under Section 41E. The
provisions of Section 41E reads as under:
"Section 41E. Power to act for protection of Charities.
(1) Where it is brought to the notice of the Charity
Commissioner either by the Deputy or Assistant Charity
Commissioner through his report or by an application by
at least two persons having interest supported by
affidavit :
(a) that any trust property is in danger of being wasted,
damaged or improperly alienated by any trustee or any
other person, or
(b) that the trustee or such person threatens, or intends
to remove or dispose of that property,
The Charity Commissioner may by order grant a
temporary injunction or make such other order for the
purpose of staying and preventing the wasting,
damaging, alienation, sale, removal or disposition of
such property, on such terms as to the duration of
injunction, keeping an account, giving security,
production of the property or otherwise as he thinks fit.
(2) The Charity Commissioner shall in all such cases,
except where it appears that the object of granting
injunction would be defeated by delay, before granting
an injunction, give notice of the facts brought to his
notice to the trustee, or the person concerned.
(3) After hearing the trustee or person concerned and
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holding such inquiry as he thinks fit, the Charity
Commissioner may confirm, discharge or vary or set
aside the order of injunction or pass any other
appropriate order.
(5) A trustee or a person against whom the order of
injunction or any other order under this section is passed
may, within ninety days of the date of communication of
such order, appeal to the Court against such order."
20. Section 41E provides for grant of temporary injunction
after the Charity Commissioner comes to finding that any trust
property is in the danger of being wasted, damaged or improperly
alienated by any trustee or any other purpose. In the present case, the
Joint Charity Commissioner instead of passing an order of injunction
which injunction was sought only for the refund of sum of Rs.
28,50,000/- into the Trust account has gone one step ahead and has
exercised his duties under the provisions of the MPT Act by instituting
an inquiry into the alleged financial irregularities. The Appellants
would want that pending the said inquiry there should be sufficient
restraints on the operations of the bank accounts by the Respondents
so as to ensure that the Trust property is not wasted or alienated
under the guise of carrying out the operations of the Trust. For that
purpose it is necessary for the Appellants to make out a case for grant
of injunction pending final disposal of the inquiry. In the present case
as rightly observed by the Coordinate Bench in the order dated 23 rd
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January, 2024 in First Appeal No. 1277 of 2023 there is not even an
averment that property of the trust is likely to be wasted or is in
danger or is likely to be disposed of at the hands of the Appellants.
21. In order to support the allegation of financial
misappropriation, all that is averred is that a sum of Rs. 28,50,000/- has
been withdrawn out of which admittedly 14,50,000/- was towards
payment of salary. It cannot be disputed that the Trust runs an
engineering institution, which would require funds to be expended for
carrying out day to day functioning of the Trust and the institution. The
power under Section 41E cannot be exercised in such manner so as to
stultify the operations of the Trust or Institution. Even in order to
impose certain restrictions on the functioning of the Trust there must
be sufficient evidence on record to show that in event there are no
restraints the property of the trust is in danger of being alienated or
misappropriated. In order to demonstrate the same, the Appellants
have taken help of the order dated 23 rd January, 2024 passed in First
Appeal No. 1277 of 2023 and would contend that though the
Respondents had submitted that the accounts will not be used except
for making statutory payments and which are required to be made only
through RTGS or by crossed cheque, non statutory payments made by
the Respondent Nos. 1 and 2. The order of 23 rd January, 2024 directed
all statutory payments such as salary, NAAC Committee fees etc., to be
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made through RTGS or by crossed cheque, which both Counsel argued
have to be complied with in letter and spirit. When so read, the order
cannot mean that apart from the illustrated statutory payments and
others belonging to the class of statutory payments no other expenses
can be met, even if they are legitimate expenses incurred for running
the operations of the Trust. It is not disputed that there are no cash
withdrawals and all payments have been made through cheque or bank
accounts. The statements of accounts relied upon by Mr. Anturkar,
would show that certain payments have been made to the person
unconnected with the Trust and allegation is that there are fictitious
expenses which are being shown and amounts withdrawn. To test the
genuineness of the allegations made, indepth investigation is required
and inquiry is directed by the concerned Authority so that proper
report is placed before the Joint Charity Commissioner pursuant to
which appropriate steps can be taken. The Joint Charity Commissioner
has rightly held that the allegation of financial irregularities and
misappropriation require comprehensive inquiry and determination
through appropriate legal channels. The Joint Charity Commissioner
has opined that the allegations which have been raised have been met
by Respondents by providing explanation and justification and
therefore an inquiry is necessitated. The finding cannot be faulted for
the reason that in the proceeding under Section 41E without any
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inquiry and a report to support the said inquiry into financial
misappropriation, it was not possible for the Joint Charity
Commissioner or even this Court to arrive at a conclusion that the
explanation tendered by the Respondent as regards the payments
made are not genuine or not for the purposes of operation of the Trust
but have been misappropriated. It also cannot be disputed that the
accounts of the Trust must have been regularly audited and the same
can also be considered at the time of the inquiry. Though Mr. Anturkar,
would assail the impugned Judgment on the ground that the same
suffers from non Application of mind in as much prima facie case of mis
management or risk to the trust property or any imminent risk to the
trust property is sought to be adjudicated, the same by itself is not
sufficient to warrant interference. Though the Joint Charity
Commissioner has relied upon the observations made by this Court in
the First Appeal, the findings do not reflect that the Application has
been dismissed solely on the findings of this Court in First Appeal No.
1277 of 2023. On the contrary, the findings of this Court have been
taken further by the Joint Charity Commissioner and direction has
been given to strictly comply with the order passed therein including
any restrictions or guidelines imposed on the management of the trust
bank accounts and operations. As the inquiry has already been
commenced and the Joint Charity Commissioner has passed well
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reasoned order though having dismissed the Application, the same
does not warrant any interference.
22. Point No. 1 is accordingly answered against the Appellants.
Resultantly, First Appeal stands dismissed.
23. In view of the dismissal of First Appeal, nothing survives
for consideration in the pending Civil/Interim Applications and the
same stand disposed of.
[Sharmila U. Deshmukh, J.]
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